UK Agriculture Post Brexit
On the 23rd June 2016, the UK voted to leave the EU. The UK is now scheduled to depart the EU at 11pm UK time on Friday 29th March 2019, whilst being under a transition period until then. Brexit was a historic referendum with ramifications for everybody, in particular the agriculture industry. The future of UK agriculture post Brexit is largely unknown.
The EU is the world’s biggest agricultural trader and has a farm policy consisting of:
- Helping farmers to produce enough food for Europe.
- Protecting farmers from excessive price unpredictability and market crises.
- Ensuring that food is safe to consume.
- Helping farmers to invest in modernising farms.
- Protecting animal welfare and the environment.
- Sustaining viable rural communities, with diverse economies.
- Creating and maintaining jobs in the food industry.
Most of the money that the UK receives from the EU (more than £3 billion) is spent on agriculture; thus, the UK farming industry heavily relies on the EU, especially as the UK is a net importer of agricultural goods, buying almost half of its food from other countries. As you can expect, the potential consequences that Brexit may have on the UK farming industry and intensive agriculture has been heavily debated about world-wide. Some posit that UK agriculture will be better off out of the EU, and others think that the industry will suffer post Brexit. An estimated 54% of UK farmers voted to leave the EU - let’s take a look at the possible pros and cons for UK agriculture after Brexit.
UK AGRICULTURE POST BREXIT: PROS
UK Prime Minister Theresa May says that Brexit is ‘a new opportunity for UK agriculture’ and its agricultural development, such as agricultural engineering. George Eustice - the farming minister, says that the UK would be better off out of the UK, adding that ‘‘We would do far better as a country, if we ended the supremacy of Europe and shaped fresh-thinking policies that really deliver for our agriculture.’’
Leaving the EU means that the UK can design and develop its own agricultural policy, which can lead to better trading, better deals and cheaper food. The UK would be able to target its own funds in a more efficient, safer and greener manner, free from the complexities of EU burdens. Farmers currently receive subsidies from the EU and Brexit would lead to a reduction on dependence on subsidies, leading to farmers becoming more productive and competitive.
Until the 29th March 2019, the UK will represent just 1/28th of a seat by the EU, on world bodies such as the world organisation for animal disease (the OIE), the World Trade Organisation, and the Codex Alimentarius (food production and safety). Outside the EU, the UK would bear significantly more global power and have a much greater influence over the rules that UK farmers must obey, for example.
Whilst the UK is set to leave the EU, the sovereign country can still enjoy access to the single market, trading with EU members. As mentioned earlier on, the UK is a net importer of agricultural goods and EU countries rely heavily on agricultural produce sold to the UK. They will not want to lose this relationship and it's likely that the EU may offer the UK advantageous trading provisions.
UK AGRICULTURE POST BREXIT: CONS
Brexit could potentially cause serious ramifications for the UK farming industry, but no-one will know the definite impact (positive or negative) that it will have, until post March 2019, when the UK does depart the EU. Funding arrangements from the EU however, are to be maintained until 2020, but after this, the future for UK farmers is unknown.
It's predicted that UK farm support will be cut by two thirds, especially with the termination of EU subsidies. This may lead to small farms disappearing and a devastating impact on commercial farming, farm incomes and land value. Post-Brexit farming may have farmers striving to slash production costs to maintain farms, leading to agricultural intensification, which can cause environmental damage.
A big concern for the UK agricultural industry, is that the UK government might use their net financial gain from Brexit to replenish the country’s potential budget shortfall, rather than using its Brexit capital to invest in and support UK farmers. The Pound has also dropped in value post Brexit and a weak pound is not good for everyone, including farmers. However, the Pound is now the highest it’s been since the referendum.
It could take years and years for the UK to re-negotiate some of the beneficial agricultural deals they have with the EU. The UK agricultural industry could be completely on its own with very little support, competing against the likes of the USA, Canada, Korea and New Zealand who already have independent, yet powerful agricultural industries.
It remains to be seen just what will happen to British agriculture when the well runs dry. No-one knows for certain what the future of UK farming will be post March 2019 - it's all speculation at this point. At Wessex International, we positively sell over 20% of our products to Europe and this is set to rise. We hope that UK agriculture after Brexit will have a positive impact on the UK agricultural industry, providing new opportunities for all.